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New America and uAspire have teamed up to create a comprehensive report that sheds light on how financial aid award letters keep students and families in the dark and offers solutions to better inform students about college costs and financial aid.

For the report they analyzed thousands of financial aid award letters and found not only that financial aid is insufficient to cover the cost of college for many students, but also that award letters lack consistency and transparency. As a result, it is exceedingly difficult for students and families to make a financially-informed college decision. While solutions for tackling the cost barrier may be complex, solutions to improve award letter terminology and formatting are well within reach.

Through a quantitative analysis of over 11,000 financial aid award letters, they found that students who receive a Pell Grant are still left to cover a significant gap—an average of nearly $12,000. The gap persisted even when students made cost-saving decisions about where to attend (public versus private colleges and universities) or where to live (at home versus on campus). Given that financial aid falls short, clear and consistent communication on award letters is critical. After a thorough qualitative review using a subset of 515 award letters from unique institutions, they emerged with seven key findings:

Confusing Jargon and Terminology

Of the 455 colleges that offered an unsubsidized student loan, they found 136 unique terms for that loan, including 24 that did not include the word “loan.”

Omission of the Complete Cost

Of the 515 letters, more than one-third did not include any cost information with which to contextualize the financial aid offered

Failure to Differentiate Types of Aid

Seventy percent of letters grouped all aid together and provided no definitions to indicate to students how grants and scholarships, loans, and work-study all differ.

Misleading Packaging of Parent PLUS Loans

Nearly 15 percent of letters included a PLUS loan as an “award,” making the financial aid package appear far more generous than it really was.

Vague Definitions and Poor Placement of Work-Study

Of institutions that offered work-study, 70 percent provided no explanation of work-study and how it differs from other types of aid.

Inconsistent Bottom Line Calculations

In our sample, only 40 percent calculated what students would need to pay, and those 194 institutions had 23 different ways of calculating remaining costs

No Clear Next Steps

Only about half of letters provided information about what to do to accept or decline awards ,and those that did had inconsistent policies.